2

In the US, do notices like "except as required by federal, state or local law" in contracts have any purpose other than to serve as a reminder to the reader/party?

If something is required by federal, state or local law, then surely it overrides any contradicting clauses in the contract, so can these notices be omitted without change to the substance of a contract?

5

Contracts are illegal if they require a signatory to break the law, so the contract here is detailing that this specific clause does not apply if following it would contradict the law. It's basically saying that no signatory may hold the other for breaking contract terms if the reason for breaking the contract terms is because the law specifically says these things are required.

For example, if the contract reads "The hotel does not allow guests to have animals in the room", this creates an illegal situation if said animal is a guide dog assisting a blind person, which must be allowed under laws for Americans with Disabilities Act (ADA).

By changing this clause to "The hotel does not allow guests to have animals in the room, except as required by federal, state or local law." Then it is now acceptable. A able bodied guest will still be in breach of contract if a cat is brought into the room, but a blind person would not be in breach because the law says you cannot use this to bar a blind person with a guide dog, and the contract must comply with the law. The Cat Person can be thrown out for breech of contract, but the blind person cannot because this exception allows the blind person to bring the dog into the rented room.

5
  • 2
    I don't think this is correct. A contract for a hotel room is not illegal just because it includes a blanket prohibition on animals; that provision is just unenforceable in cases where it conflicts with the law.
    – bdb484
    Sep 25 '18 at 16:09
  • 2
    The unanswered question is whether a contract has ever been held to be unenforceable because of the lack of a disclaimer. That is, the disclaimer is always implied by the nature of contract law, and need not be said explicitly. It's good public relations, but not legally required.
    – user6726
    Sep 25 '18 at 18:00
  • @bdb484: It's a CYA thing. Basically, if there is a resonable likely-hood that the terms may come into conflict with the law, the law overrides the terms in those situations. Bascially, I must meet the terms of the contract unless some law deems it illegal to meet these terms, in which case, such terms are invalid. Basically short changes any party claiming breech of contract for failure to uphold the terms due to legal restrictions.
    – hszmv
    Sep 25 '18 at 18:37
  • 1
    Nice answer (+1). Additionally, the disclaimer/exception preempts (1) the need for declaratory relief, and (2) a suspicion that the contract draftsman is ignorant or disavows the law. Sep 25 '18 at 22:39
  • 1
    It also keeps the contract up to date with whatever the current law is, without requiring it to be rewritten if the law changes.
    – Bobson
    Sep 26 '18 at 12:02
1

Modern jurisprudence is that courts will “read down” unenforceable terms to give effect to the contract as far as possible. It is of course possible that an essential term is unenforceable which would make the entire contract void. It has not always been so and historically a void term, even an incidental one, would void the entire contract.

In modern usage, the primary reason for such a clause is to ensure compliance with consumer protection laws that prohibit misleading and deceptive conduct.

For example, if the terms of the Steam platform had included such a clause, Valve software would not have incurred multi-million dollar fines in Australia for stating that “Refunds will only be given when X” because Australian law requires refunds for defective goods and services (not part of X). If the clause had been prefaced with “Except as required by law ...” it may not have been deceptive and misleading.

0

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.